Do sheep look up?

It should be easy to write a quick
summary of the economy of Northern Ontario. After all, I have been
writing about the Northern economy for years. I am one of the
so-called “experts” that the CBC calls for comments. I can draw
on Wikipedia and the Statistics Canada Database, CANSIM.

And I have Chris Southcott’s terrific
studies based on the 2006 Census. In 2008, Southcott, a sociologist
at Lakehead University, produced a dozen studies for the Local Labour
Market Training and Adjustment Boards in Northern Ontario.

The studies look at age structure,
wages, occupation, women, Francophones, Aboriginals, industrial
structure, youth migration, and so on, for 2001 and 2006. The studies
are online and should be required reading for all Northerners.

The picture Southcott drew wasn’t a
surprise. Population was falling, the resource industries were
employing fewer people, and “blue collar’’ jobs were
disappearing.

Thirty-one thousand jobs had vanished
in the industrial sector between 1986 and 1996. They were almost
replaced by 30,365 jobs in the service sector. Even during the boom
running up to 2007 the resource sector lost jobs. Mining gained 1,175
but agriculture, forestry, hunting and fishing lost 1,385. Health and
social services gained 5,435 jobs but manufacturing lost 5,685.

Southcott found that outmigration has
slowed down a bit. Incomes were a bit lower than the rest of the
province and were declining, and we had fewer rich and more poor
people. First Nations communities were lagging on just about every
social indicator.

His studies tell us the North is in
trouble. Behind the grim facts are three economic realities. The
first is that every year technological progress reduces the labour
needed in logging, mining and mills. The region either finds other
products to export or it declines. It has been declining.

The decline has been hidden by the
growth of the service sector and the expansion of the healthcare
system. The shift to services is losing steam, however. It will get
harder to ignore the declining need for Northerners.

The second fact about the Northern
economy is that Northerners are costly.

Northerners need more roads, snow
clearing, miles of sewer, water plants, schools and hospitals per
person than people in the crowded south. They also require more
police and fire services per person, especially in the rural areas.
Northern communities average more broken water lines and more library
use. (We seem to read more library books than southerners.) According
to Ontario’s Municipal Performance Measurement Program (MPMP) most
municipal services cost more in Northern Ontario.

Queen’s Park isn’t interested in
promoting expensive population growth in the North. And Queen’s
Park has no incentive to promoting secondary industry in the North
either. Why should the Cabinet care if a plant locates north or south
of the French River?

The third major economic fact is that
the Northern Ontario economy is about as developed as the gut of an
earthworm. As fast as money goes in one end, it goes out the other.
Digital dollars from the Eurozone, China, the U.S. Or Queen’s Park
land in local workers’ bank accounts. Before you can blink, part of
every cheque is transferred to financial institutions in the south to
cover mortgages and debt. Almost all the rest is paid out directly or
indirectly to companies based elsewhere. And it’s getting worse:
Walmart, Amazon and all the new economy firms have business plans
based on minimizing the amount of money left north of the French.
When money doesn’t stick, economic development doesn’t happen.

Southcott provides an explanation for
Northern Ontario’s pathetic level of economic development. In the
background section of each of his reports he notes that the North has
always been run from outside. As a result, local political and
economic entrepreneurship has been “more limited than in other
areas.” The correct translation, I think, is that Northerners are
political and economic sheep. There isn’t much point waiting for
the province to change direction. It’s had 100 years. In the last
few decades it has messed up the forestry sector and fumbled the
mining portfolio.

Northern Ontario will just keep
shrinking unless we sheep decide to do something different.